“Five Crore Reasons to Get ADR Right” - A Critical Appraisal of India's ADR Framework in 2026

The Courts Cannot Carry The Weight Alone

Age long, India has been blessed to have a dynamic structure of dispute resolution which does not even require stepping into a courtroom. For centuries, village panchayat has been the backbone of dispute resolution in this country. A system where village elders would sit under a tree, hear both sides and settle the matter. Later on, when the British arrived with their adversarial court system something so simple got lost. What replaced the panchayat was a judicial system that, as of early 2026,is straining under more than five crore pending cases.¹

Mediation is one of the alteranate dispute resolution mechanism which is more promising responses to this backlog.The Mediation Act, 2023 under section 22 lays down a structured yet flexible timeline of dispute resolution that is 120 days, extendable by another 60 days to keep matters from dragging on indefinitely.² There are early signs this is working, between April 2022 and June 2023, NALSA-led mediation resolved roughly 0.11 million cases, a number that points to growing acceptance of the process.³ Institutional backing has also followed as the India International Arbitration Centre (IIAC) received a government allocation of ₹3.56 crore for 2025–26 to strengthen dispute resolution infrastructure. Even the corporate world appears to be coming around, a 2023 survey found mediation to be the second most preferred method of resolving disputes in businesses.⁴ Litigation still dominates, but the tide is slowly turning towards more convenient ways of settling disputes.

A Good Law in Search of an Institution

The centrepiece of the Act's institutional design is the Mediation Council of India (MCI). The MCI is supposed to register mediators, accredit service providers, set quality standards, and maintain a national repository of settlement agreements. The contradiction is that there are a lot of limitations to its function. As we can see, there are no uniform mediator qualifications, no accreditation for mediation service providers, and no checks on quality.Any mediator can be seen to hang up a sign. Any organisation might call itself a mediation centre. The 2023 Act intended to fix this but currently it hasn't, because the body meant to enforce the fix doesn't yet exist.
The next highlight is the original Bill which wanted mandatory pre-litigation mediation. It means you would not file a suit without first trying mediation. The Parliamentary Standing Committee did not agree, arguing it would just add delay before parties reached courts which they were always going to reach anyway. The final Act makes pre-litigation mediation only voluntary under Section 5.⁵ Courts can still refer disputes to mediation at any stage under Section 7, and grant interim orders. But voluntary mediation, in a country where most people don't know this exists and those who do don't quite trust it, won't want to move the needle system on their own. The contrast with the Commercial Courts Act 2015 is distinct, the Act makes pre-institution mediation mandatory for commercial disputes above a certain threshold, and it has produced measurable results.⁶ The Mediation Act's voluntary approach was a cautious choice. Whether it was the right one remains to be seen.

The Law Is Catching Up To Be Digital

It took a pandemic, not a policy programme to move Indian courts to online mode. By March 2020, hearings were taking place over video calls, documents were being filed digitally, and arbitrations were running start-to-finish without anyone being in the same room. Perhaps that normalisation stuck. The legal basis for Online Dispute Resolution sits across multiple statutes rather than in one place.⁷ But this shift carries real implications for Online Dispute Resolution (ODR). If digital access is treated as a fundamental right, then making ODR the primary channel for resolving disputes without first ensuring that access is genuinely available to everyone raises serious constitutional questions. The State can't push people toward online mediation while 55% of the country still lacks reliable internet. This judgment sets the terms for that debate.⁸

That digital divide is the honest limit of ODR's reach right now. Rural India, where 65% of the population lives, faces connectivity problems. These are not going away anytime soon, and a dispute resolution system built as though they will risks excluding the very people it is meant to serve. Designing ODR as though India were a fully digital country would repeat a mistake the European Union has already made: building a platform that looked impressive on paper but went largely unused in practice, and was quietly discontinued in July 2025 after nearly a decade of negligible uptake.⁹

Global Perspective: What India Can Learn

Singapore introduced the 7th edition of the SIAC Rules in January 2025, which came with a built-in digital case management system called SIAC Gateway.¹⁰ The system lets parties file documents electronically, make payments online, and store case records in one place, cutting down on the paperwork and delay that arbitration proceedings can otherwise get bogged down in. It has quickly become one of the most-discussed features of the new rules. India would do well to ratify the Singapore Convention on Mediation, both to draw on this kind of institutional design and to strengthen the functioning of the IIAC.
Singapore has also gone a step further by formally recognising third-party funding which is an arrangement where an outside financier bears the cost of a party's legal proceedings in exchange for a share of any eventual award. India has no comparable regulatory framework yet, and the gap shows: the IIAC's ₹3.56 crore allocation for 2025–26 is a modest sum earmarked for infrastructure, not the institution's full operating budget.¹¹
China offers a different lesson. Its internet courts use artificial intelligence to handle e-commerce disputes from filing to judgment. India's use of AI in dispute resolution, by contrast, remains at an early pilot stage, with SEBI arguably the furthest along in actually deploying it.¹²
There is a lesson, in what not to build. The European Union's Online Dispute Resolution platform was quietly shut down in July 2025 after nearly a decade of negligible use¹³ proof that a digital dispute resolution mechanism designed without checking ground realities can end up serving almost no one. India, notably, has no national-level ODR platform of its own; what exists instead are sector-specific platforms run by the RBI, SEBI, and IRDAI.
Encouraging development in 2026 has been the Hyderabad based Amika Arbitration and Mediation Council has received UNCITRAL recognition¹⁴, making it one of only four Indian institutions to achieve that status. Small wins matter. They show that Indian institutions can meet international standards when they're given the space and support to try.

Conclusion

Recent trends of dispute resolution across the world offer some useful lessons to India. The rules introduced by the Singapore International Arbitration Centre, UK's new Arbitration Act, China’s AI internet courts, and the closure of the European Commission's ODR platform each highlights a pattern which must be learnt from. When we talk about India, the focus should not be on copying these systems but on understanding what has worked & what has not.We must strive to examine how these experiences can help shape reforms that
suit its own legal and institutional needs.
The law is ahead of the institutions at this point because by merely giving legal recognition to mediated settlement agreements, promoting institutional mediation, encouraging pre-litigation mediation, and allowing the use of online mediation, the legislation only anticipates the future direction of dispute resolution not present situation. What's needed in present moment is the MCI constituted before the end of 2026, with members appointed and rules notified. The Singapore Convention, India has been a signatory for six years and still hasn't ratified it, which tells every cross-border party something unflattering about how seriously India takes international mediation. The Draft Arbitration Bill tabled, with the Appellate Tribunal provisions reworked after genuine stakeholder consultation. An ODR national platform designed around rural users, not city-based lawyers.
There's something almost poignant about where India finds itself. The country that invented the panchayat, that understood intuitively that the best way to resolve a dispute is to give people a process they feel they own is struggling to make a modern statutory version of the same idea work. The Mediation Act 2023, at its best, is an attempt to recover that understanding. But recovery requires more than a good law. It requires the unglamorous work of setting up an office, hiring staff, writing rules, and actually opening the door.

References

1. National Judicial Data Grid, 'Pending Cases' (NJDG, 2026) https://njdg.ecourts.gov.in accessed 1 May 2026. ↩
2. Mediation Act 2023 (No 32 of 2023), s 22. ↩
3. Shirin Khajuria, 'Reimagining Justice Through Mediation – An Analysis of The Mediation Act, 2023' (Law School Policy Review, 8 August 2025) ↩
4. ibid. ↩
5. Ministry of Law and Justice, 'Status of Mediation Council of India' (Department of Legal Affairs, Government of India) https://legalaffairs.gov.in/parliament-q/status-mediation-council-india accessed 1 May 2026; Aarsh, 'India's ADR Institutionalization: The Great Wait Continues' (NLIU ADRC, 21 March 2026) ↩
6. "Territorial Jurisdiction for Pre-Institution Mediation under The Commercial Courts Act, 2015" (2025); PRS Legislative Research, Legislative Brief on the Commercial Courts (Amendment) Bill, 2018. ↩
7. Shardul Amarchand Mangaldas & Co, 'From Litigation to Automation: The Legal Future of ODR in India' (8 January 2026) https://www.amsshardul.com/insight/from-litigation-to-automation-the-legal-future-of-odr-in-india/ accessed 1 May 2026. ↩
8. 'Arbitration Archives' (SCC Times, 2026) https://www.scconline.com/blog/post/tag/arbitration/ accessed 1 May 2026 (noting ICA 5th Edition International Conference, Delhi High Court, 10–11 April 2026, and AAMC UNCITRAL recognition). ↩
9. The EU's Online Dispute Resolution (ODR) Platform was launched in 2016 under Regulation (EU) No. 524/2013 to help consumers and traders resolve disputes over online purchases without going to court. The European Commission discontinued it on 20 July 2025 under Regulation (EU) 2024/3228, citing negligible use reportedly around 200 cases resolved per year across the entire EU. Sources: European Consumer Centre Finland, "The European Online Dispute Resolution (ODR) Platform will be discontinued as of 20 July 2025"; Kluwer Mediation Blog, "End of an Era: From Clicks to Complaints – What the EU ODR Platform's Closure Means" (2025). ↩
10. Singapore International Arbitration Centre, SIAC Rules 2025 (7th edn, SIAC 2025) https://www.siac.org.sg accessed 1 May 2026. ↩
11. Bird & Bird, "SIAC Rules 2025 7th Edition steps to further strengthen institutional arbitration" (2025); Herbert Smith Freehills Kramer, "7th Edition of the SIAC Rules published and to take effect in 2025." ↩
12. Global Legal Insights, 'Litigation and Dispute Resolution Laws and Regulations: India 2025' (2025) https://www.globallegalinsights.com/practice-areas/litigation-and-dispute-resolution-laws-and-regulations/india/ accessed 1 May 2026. ↩
13. Kluwer Mediation Blog, "End of an Era: From Clicks to Complaints – What the EU ODR Platform's Closure Means" (2025). ↩
14. 'Arbitration Archives' (SCC Times, 2026) https://www.scconline.com/blog/post/tag/arbitration/ accessed 1 May 2026 (noting ICA 5th Edition International Conference, Delhi High Court, 10–11 April 2026, and AAMC UNCITRAL recognition). ↩